The US financial watchdog, which led a crackdown on the world’s largest accountancy firms last year under the leadership of Arthur Levitt, is now under the chairmanship Harvey Pitt who is viewed as less stringent in his approach to enforcement regulations.

It is hoped that an environment of increased co-operation between the regulator and the companies it regulates will speed up processes as well as make better use of SEC resources.

‘It reflects a high priority on encouraging co-operation, that co-operation is beneficial to investors and integral to an enforcement programme that seeks to respond in real time to wrongdoing,’ Stephen Cutler, acting director of enforcement at the SEC, was reported as saying in the Financial Times.

The SEC announced the policy change while investigating Seaboard, a pork and poultry business based in Kansas. Citing the company’s co-operation, the commission decided to take no action against one of Seaboard’s subsidiaries, Gisela de Leon-Meredith, for allegedly keeping inaccurate books and records that caused mistated financial reports.

In future, the SEC will take into account if a company promptly reports irregularities. It will also look at whether the company disciplines employees who were at fault and acts to improve its controls. Links